JLF Research Archive
Showing items 426 to 450 of 482
As leaders of the N.C. General Assembly discuss the possibility of a special session in December, preliminary indications are that appropriate state spending for hurricane relief will be far lower than expected. The Hunt administration's emergency request for $1.8 billion from Congress was inflated and its assumptions unrealistic. For government infrastructure and aid to those without other access to relief, total cost will not exceed state funds already available for next year.
North Carolina's dramatic election on November 7 selected a slate of federal, state, and local leaders, but slim margins and a focus on personalities and name recognition gave few winners a clear mandate on issues. Polls taken before and after the vote consistently found an electorate that was fiscally conservative and favorable to increased consumer choice in such areas as health care, education, and Social Security. Policymakers should seek consensus on these critical issues.
Three new studies should give North Carolina policymakers pause about the state's current economic development policy. A Kenan Institute survey of international firms throws cold water on the notion that selective tax breaks for big business are an effective means of creating jobs. Along with two other reports, it suggests a different growth agenda: improve core public services such as roads and schools, tackle electricity restructuring, and reduce and reform taxes for everyone.
The lengthy budget negotiations between House and Senate this year resulted in a compromise that gave the Senate its spending priorities this year and the House its tax cuts in future years. Overall, when accounted for correctly, the state General Fund budget will top $13.1 billion in FY 1998-99, representing an 11 percent increase from last year. Spending growth outweighs tax cuts in FY 1998-99 by a ratio of 25 to 1 — but the picture improves somewhat in the out years, when House-sought cuts in sales and inheritance taxes are phased in.
A new six-county study of Smart Start shows little benefit for most children once they reach school. Coupled with the results of three other studies released since early 1998, these findings make the case for significant reform in the state's approach to early childhood policy. Smart Start should be reformed to 1) provide direct assistance to disadvantaged preschoolers and 2) give North Carolina families more resources with which to improve their children's readiness for school.
Summary: The University of North Carolina Board of Governors has proposed a capital spending plan calling for nearly $5 billion over the next decade to modernize and expand the system. To pay for it, UNC wants the authority to raise funds by the issuance of two kinds of bonds that would not be subject to voter approval. While there is undeniable need to renovate academic buildings, taking care of the worst needs over the next four years would cost about $1.1 billion and could be handled through the existing budget process if repair and renovation were made the top university priority. The need for a large-scale construction program is dubious and does not require the use of non-voter-approved bonds.
State lawmakers will consider today a revised tax and spending plan for the 2001-03 biennium that promises to shove an already teetering economy, buffeted by layoffs and the prospect of war, into a full-blown and painful recession. Its massive tax hike will fuel a healthy increase in wasteful state spending and help to push the state’s tax burden well above that of Massachusetts, California, and all the Southeastern states — and higher than the national average for the first time.
The ghastly terrorist attacks in New York City and Washington will have overwhelmingly negative consequences for the nation’s economy, despite the foolish suggestions of some that it will result in a net stimulus. North Carolina’s economy promises to be particularly hard-hit by troop deployments and faltering investor and consumer confidence. Now is the time for state leaders to dedicate themselves to strengthening the economy, not weakening it through massive tax hikes.
Gov. Mike Easley and other proponents are reportedly preparing to resurrect the idea of a state lottery for North Carolina. The case for this regressive and unpredictable source of revenue has, if anything, weakened in recent months, as other states with lotteries have experienced significant revenue shortfalls. The fact remains that Easley is overestimating the lottery’s potential revenue, thus creating the risk of additional tax increases in the future to make up the difference.
North Carolinians deserve a complete and accurate picture of how their public schools are doing relative to rigorous national and international academic standards. The state's current accountability system, the ABCs of Public Education, is a good first step but needs improvement to increase the reliability and usefulness of information provided to parents and taxpayers.
North Carolina's public school leaders are touting rising scores on state tests to prove that things aren't as bad as critics complain. However, the current method of calculating school performance misleads the public. The emphasis on "growth" shifts attention from true student achievement to a manufactured "feel-good" measure.
Supporters of the so-called "Clean Smokestacks" bill now under consideration by the state legislature are citing a study they claim proves that the legislation would save the lives of a thousand North Carolinians annually. In fact, the study says no such thing. Its subject matter bears little relationship to the bill's likely impact on North Carolina, which would be limited because most power-plant emissions affecting the state's air quality originate outside North Carolina.
Despite hype to the contrary from state officials, the just-released 1997-98 ABC test results showed once again how poor the level of public education in North Carolina remains. Rating schools on the basis of student achievement, the Locke Foundation found that only 1 percent of public schools deserved an "A" for imparting grade-level skills to at least 90 percent of students. Fully half the schools received a "D" or "F."On average, only 66 percent of public school students tested at grade level — with far worse results on more rigorous national tests.
Since it was proposed by Gov. Jim Hunt in 1993, Smart Start has generated statewide and even national attention for its intriguing promise of combining public and private resources to boost educational achievement through early intervention. But two recent studies, one of its finances and the other of its effectiveness as an educational investment, challenge Smart Start's extravagant claims of success. The program has attracted little support from the private sector, and does not significantly improve the educational attainment of most preschoolers.
A new plan from N.C. House Democrats to increase state and local taxes by another $633 million in FY 01-02 would further damage North Carolina's already weakening economy. If passed, the tax hikes would push North Carolina's tax burden higher than the national average for the first time in history, and 12 percent higher than the regional average. Our tax burden would far exceed those of such states as California, Illinois, Maryland, Massachusetts, and Pennsylvania.
A plan to increase North Carolina's sales tax by up to one penny, with a corresponding reduction in tax reimbursements to local governments, could endanger the state's economic recovery and threaten tens of thousands of jobs. No change in expected revenue growth or threat to the state's bond rating would have consequences severe enough to justify a $400 to $800 million tax hike on families and businesses whose tax burden is already the highest in the Southeast.
Embedded within "clean smokestacks" legislation now moving through the General Assembly is the creation of a new commission to develop state policies to combat global warming. But the scientific issues involved are complex and unsettled. If North Carolina were to try to reduce greenhouse-gas emissions on its own, it would have a trivial impact on global climate but destroy tens of thousands of jobs, particularly in the state's faltering manufacturing sector.
Author Doug Bandow looks at the ways in which government intervention into the provision of electric power has harmed consumers, and he recommends ways to make the system more competitive. (62 pages-not available online.)
Homeownership is a vital component to a stable society and a thriving economy. It is a well-known presumption that owning a home gives an individual a stake in his or her society. For example, according to a recent study by scholars at the University of Chicago and Harvard University, homeowners are 10 percent more likely than renters to work to solve local problems. Another consideration is that homeownership is also the most common form of savings for the average working family. A home is typically the largest investment most families have.
By Jonathan C. Jordan and Michael Lowrey
Budget negotiations between the House and Senate typically lead to higher spending, as each side accepts all or part of an item the other wants. Another approach would be to accept only spending common to both budgets, a "reverse logrolling" that lets government expand only when a consensus exists to do so. For FY 2000-01, this approach would save nearly $200 million for future state employee benefit reforms and raise operating spending by only 3.8 percent.
The North Carolina House is debating its version of a 2001-03 state budget this week. Although imposing only a $6 million tax hike in contrast to the $233 million tax increase included in the Senate budget House leaders still managed to increase General Fund spending by 4.4 percent in the coming fiscal year, relying on increased collections of delinquent taxes, interagency transfers, and debt-service savings to balance the books. Now the budget battle really begins.
State employees can't be blamed for seeking better compensation. All workers do. But to fulfill their responsibility to taxpayers, lawmakers should rely on solid data when evaluating pay requests. The vacancy rate in state government is highly exaggerated, for example, while the number of vacant jobs actually being advertised is shrinking rather than growing. Furthermore, national data suggest that N.C. state workers are competitively paid on average and cannot demonstrate the higher productivity that might justify higher pay levels.
Putting the House's FY 2000-01 budget into proper perspective requires careful consideration of how spending should be measured and how it has changed over time. Furthermore, proposed changes in how the payroll and teacher bonuses are budgeted are more than just accounting gimmicks. They represent a net reduction in state savings. The bottom line for taxpayers: if current trends continue, state leaders will be setting the stage for tax increases in the near future.
A recent report showing that many state university buildings are in very poor repair and warning of explosive UNC enrollment growth has led to a proposal that would allow the state and the university system itself to sell bonds without voter approval. There are strong reasons to doubt that this is the best way to solve the problem of building maintenance, and to consider redirecting existing funds and allowing more students to choose private colleges to reduce the pressure.
Some state lawmakers are discussing a plan to give local governments the authority to raise their sales taxes by up to 1 penny while simultaneously eliminating state tax reimbursements. While it is true that many counties are raising property taxes this year, most have not been starved for revenue during the 1990s. More importantly, the state can give the same assistance to localities without raising taxes by increasing flexibility and assuming more responsibility for Medicaid.
